Inflation remains tame as consumer prices edge up just 0.1%

Inflation remained in check last month with consumer prices edging up only slightly as low gasoline costs offset higher grocery store bills.

The Consumer Price Index rose 0.1% in September after dropping 0.2% the previous month, the Labor Department said Wednesday.

The August decline was the first since April 2013 for the index, a closely followed measure of costs for a variety of products and services.

September’s increase was slightly better than expected by economists, who had forecast prices would remain unchanged last month.

But the increase was small enough to keep inflation during the previous 12 months at 1.7%, the same as for the one-year period that ended in August, the Labor Department said.

The Federal Reserve targets a 2% annual inflation rate and uses a different measure based on personal consumption expenditures that has been running lower than the Consumer Price Index.

The most recent reading, for the year ended in August, was 1.5%.

Wednesday’s inflation data relieve pressure on central bank policymakers to start raising rock-bottom interest rates.

“Inflation is low with no indication of an acceleration,” said Gus Faucher, senior economist at PNC Financial Services Group.

He expects the Fed to keep its benchmark short-term interest rate near zero “well into 2015.”

The so-called core price index, which excludes often volatile food and energy costs, was up 0.1% last month after remaining flat in August.

A 1% decline in gas prices last month helped push energy costs down 0.7%, the Labor Department said.

Oil prices have fallen as slowing economies in Europe and elsewhere globally have reduced demand.

Gas prices, which soon could drop below $3 a gallon nationwide, were down 3.6% for the year ended in September, the Labor Department said.

The decline in energy costs offset an increase of 0.3% in grocery store food prices last month after a 0.2% rise in August.

Beef and veal prices jumped 2% in September and were up 16.7% since January.

Overall food prices, which include restaurant costs, were up 0.3% last month as well. Prices for shelter, such as rent and hotels, also rose 0.3% last month.

For breaking economic news, follow @JimPuzzanghera on Twitter